'Blockbuster' SFO case crumbles at dismissal stage

Yesterday, after 5 days of legal argument, Mr Justice Hickbottom dismissed a charge brought by the SFO against Leighton Humphreys, the client of Mr Jonathan Elystan Rees of chambers, in a case previously been described by the SFO as a 'blockbuster'.

Mr Humphreys, a director of Celtic Energy Limited (CEL), and five others had been charged with conspiracy to defraud relating to the sale by CEL of four opencast mining sites to a company incorporated in the British Virgin Islands. The effect of the sale under the Town and Country Planning Act 1990 was that CEL was released from any future obligation to restore the land after mining ceased. Also charged with Mr Humphreys was Richard Walters, the sole owner of CEL, three solicitors instructed to advise CEL, Mr Eric Evans, Mr Alan Whiteley and Ms Frances Bodman, and an eminent commercial silk, Mr Stephen Davies QC.

Mr Humphreys maintained throughout that the transaction was perfectly lawful and honest, and that he had acted on the proper advice of experienced lawyers.

After hearing complex legal argument as to the statutory operation of the Town and Country Planning Act 1990, the Coal Industry Act 1994 and the scope of the common law offence of conspiracy to defraud, Mr Justice Hickinbottom agreed with the submission made on behalf of Mr Humphreys that (1) the deal was indeed lawful; (2) that it cannot be dishonest to act lawfully; and (3) that an agreement to achieve a lawful object by lawful means can never amount to a conspiracy to defraud.

Having dismissed the case, Mr Justice Hickinbottom then refused an application by the SFO to prevent reporting of the collapse of their case for 28 days.

Jonathan Elystan Rees of chambers was instructed by Mr Simon Evenden of De Maids solicitors and led by Mr John Charles Rees QC. Mr Humphrey's defence was funded by managerial liability insurance.